Qatar National Bank (QNB) considered that the initial results of the economic agenda known as 3-3-3, launched by the US administration a year ago, include indications of higher-than-expected economic growth, alongside persistent challenges in controlling public finances, as well as tangible progress in the energy sector.
The bank’s weekly report said that the US economy has shown notable resilience, supported by monetary easing and the early stages of an investment cycle driven by artificial intelligence. However, controlling public finances remains the greatest challenge, while the energy sector is achieving real progress through diversification and supply security rather than a traditional oil boom.
The report noted that the plan aimed to achieve economic growth of 3 percent, reduce the fiscal deficit to 3 percent of GDP, and increase domestic energy production by 3 million barrels per day by 2028.
In this context, the report pointed out that the US economy experienced a slowdown during 2025, but it was far less severe than initial estimates, reflecting the economy’s resilience. The report also noted that, despite the expected negative shock resulting from the high tariffs imposed after what became known as Liberation Day, the actual effects on growth and inflation have remained limited so far. Real growth stabilized near 2 percent, below its historical average, but still positive. The report attributed this resilience to a set of interrelated factors, including the continued strong performance of household consumption, supported by solid balance sheets and rising asset prices, which mitigated the cumulative impact of inflation. Meanwhile, monetary policy gradually shifted its stance from restrictive to neutral, reducing borrowing costs and contributing to easier financial conditions through late 2025.
QNB said that the most important development was the clear emergence of a new investment cycle driven by artificial intelligence, encompassing significant capital spending by major US companies on data centers, semiconductors, and digital infrastructure, thereby strengthening the formation of productive capital.
The report assessed that although the full impact of these investments will take time to materialize, the trend points to potential support for medium-term growth, keeping the 3 percent target within reach in the coming years.
By contrast, the report pointed out that the results of the fiscal pillar of the plan were disappointing, as reducing the federal deficit to 3 percent of GDP proved to be an unrealistic goal in the first year. Deficit levels remain high due to structural spending pressures, extension of tax exemptions, and political constraints that hinder meaningful fiscal consolidation. The report noted that the establishment of the Department of Government Efficiency (DOGE), led at the time by Elon Musk, represented one of the administration’s main bets to curb waste and improve spending efficiency. However, despite media momentum and the limited savings achieved, the initiative’s impact remained marginal compared with the scale of the challenge, as entitlement programs, defense spending, and debt service costs continue to account for the largest share of the budget.
The report added that official estimates and most independent forecasts indicate that the deficit will remain close to 6.2 percent of GDP in 2026 and will decline only slightly over the medium term. It said that these figures reflect the difficulty of reconciling tax cuts with strict fiscal discipline under the current US political reality, while tariff revenues remain insufficient to close the gap.
On the energy front, the landscape has evolved in a more complex manner. While the target of adding 3 million barrels per day of crude oil production has not yet been achieved, US energy output has continued to grow through a broader mix of sources.
Capital discipline constraints, maturing oil basins, labor shortages, and rising costs have limited the potential for rapid expansion in crude oil production.
By contrast, the US energy sector has seen notable expansion when measured in total petroleum liquids and barrels of oil equivalent, with continued growth in natural gas production. A more neutral regulatory stance toward oil and gas has helped reduce uncertainty and encourage gradual investment, while renewable energy sources have continued to expand, driven by economic viability.
